To SEO or not to SEO

I had a number of follow up questions to last week’s article on getting prospects to your website. Namely, when does it make sense to use search engine optimization (SEO), and when does it make sense to use something different?

There is a lot that goes into the decision process, including knowing what is SEO, what are the different types of SEO, what are the SEO tactics that work and what can get you into trouble, etc. However, here is a simple four-question inquiry that can greatly simplify the decision process.

All websites will benefit from following SEO best practices. In other words, everyone will benefit from a minimum level of SEO. But whether or not SEO as an investment can result in a large financial return varies greatly from business to business.

1) Is your customer searching for a known commodity?

When someone could really use your product or services, but they don’t know that you exist, what would they type into the search engine to find you?

If my pipe is broken, I type in “plumber”

If I need my basement finished, I type in “remodeling company” or “basement finishes” or “home builder”

If I need something to play movies, I type in “best DVD players”

If I need a home loan, I type in “mortgage company” or “home loan” or “refinance”

These are all searches for a known commodity. If someone is making the search, and you rank well in the search results, you can make a sale. Hence, SEO could potentially be a viable marketing strategy.

But, what if you have a truly innovative product that most people have not heard of?

A light bulb with a special frequency that induces weight loss

A portable, cardboard folding table to take with you to the airport

A wrist watch that monitors blood glucose levels

Since most people have not heard of these products, they are not searching for them. Hence, SEO would not likely provide a high return on investment for these businesses.

2a) Are you selling a product or a service?

2b) Is what you are selling (product or service) a need or a want?

Services

People tend to perform an online search for service providers when there is a need. For example, people are searching all day long for plumbers, dentists, chiropractors, electricians, veterinarians and real estate agents. When the service is something that I may greatly benefit from, but I could also live without it, it’s generally not top of mind. For example, there are relatively few searches for business consultants and life coaches.

Where there is a want (but not a need), people tend to search for information rather than service providers. Here in Denver there are hundreds of searches per month for information about how to swing a golf club, but only a few searches a week for a golf instructor.

There are, of course, exceptions to the rule. When the need is extremely high (i.e., life threatening), then I am more likely to rely on a referral than an online search. Think heart surgeons and really high-powered criminal attorneys. And some businesses, like restaurants, fall into both categories.

Products

In general, people are not searching online for the products that they need, like fruit, milk, bread, meat, toilet paper, cleaning supplies, etc. They are searching for products that they want, like “fishing boat,” “large screen TV” and “Tickle Me Elmo doll.”

3) In what market am I competing?

Once we know how many people are searching, we also need to know what the competition is like. Is your market local, or regional, or national, or International? How many competitors do you have in your market?

If you’re selling TVs, you may consider your market to be local, but in online search you are competing at a national level. There may be 100,000 searches per month for “large flat-screen TV,” but if there are 10,000 competitors, it’s going to be a very large investment to rank well enough to get any business. In contrast, if you are a manufacturer of deep draw metal stampings, there are relatively few competitors nationwide, and a good SEO campaign could capture a significant percentage of the market.

Google’s personalized and localized search results have created huge opportunities for local service providers. If you are a chiropractor, you are competing in a local market. There may be 45,000 chiropractors across the US, but when someone performs an online search, you actually only have around 200 competitors. Since most of them are not properly optimized for search, if you do your SEO right, there is a good chance of getting a lot of business.

Another factor is how much your competition is investing in their marketing. Many law firms invest heavily in SEO, but most lawn care companies do not. So if you’re a lawn care company, you could get a good return from SEO with a much smaller investment than the law firm down the street.

4) What’s the value of a new customer?

To do SEO right is not cheap. It takes a lot more work to run a good SEO campaign than it does to build a website. So if you do end up at the top of the heap, what is the value of a new client?

For most businesses, depending on profit margins, a reasonable marketing investment may fall between 5% and 15% of revenues. It does not make a lot of sense to invest $1,000 in order to sell an additional 1,000 widgets at $2 each, if the profit margin on each widget is only 20 cents.

If a $1,000 investment in SEO will get me 15 new dental patients, and the value of 15 new dental patients at $1,200 each is $18,000, I’d want to do that in a heartbeat.

Or if I’m a specialty manufacturer and each new client is worth $150,000, getting one client will pay for the entire campaign!

I hope this simple, four-question inquiry will help in evaluating whether or not you should consider SEO as part of your marketing mix.

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